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Logistics & ops
/ 5 mins
Oct 12, 2023
Are you burnt out? Or are you looking to launch a new product with less risk? Dropshipping can save you time and money.
What is dropshipping? It’s a fulfillment method in which you don’t keep products in stock. Instead, when a customer places an order, you purchase the product from a third-party supplier, such as a wholesaler or manufacturer, who ships directly to your customer.
Low start-up costs for testing new product types or e-commerce verticals.
No risk if products don’t sell.
No overheads for inventory, product handling, and storage.
Can run the business from anywhere with an internet connection.
Can offer a wide variety of products by sourcing from various suppliers.
Can be easier to scale because you don’t have to manually fulfill each order.
Without the hassle of complex fulfillment, dropshipping is a common choice among early entrepreneurs.
Lower profit margins compared to buying products in bulk (or manufacturing yourself), especially in popular niches where there’s stiff competition with a low barrier to entry.
Your brand’s reputation is on the line if a supplier makes a mistake with an order or provides a subpar quality product.
Products you sell may be missing your branding, unless you find white label-enabled suppliers (what a mouthful).
If your suppliers are out of stock, you can't fulfill orders.
Less control over delivery and fulfillment times.
Communicating shipping costs and estimates to your customers through Shopify can become complex when sourcing from different suppliers.
These challenges are typically manageable for experienced entrepreneurs who already have processes in place and a good understanding of their target market.
Identify niches that align with your brand. Pay attention to market segments that have unique needs or preferences. Consider demand, profitability, and availability.
Are competitors already dropshipping? What terms do they offer? What suppliers do they use?
Shortlist dropshipping suppliers based on product quality and timely delivery.
Factor in profit margins and competitors when pricing your products.
Integrate with Shopify: the steps to list products on your Shopify store will depend on the supplier’s tools or app you’re using (more on this later). Most dropshipping suppliers will have a system that automatically updates product listings and stock levels.
Communicate estimated delivery times on product pages and factor in a buffer of a few days, given that you're not in control of inventory or shipping times. Use high-quality product photographs and write unique descriptions that are not found on other websites to benefit your search engine optimization efforts.
Test if orders from your Shopify store are automatically forwarded to your supplier. Test what happens when products are returned.
Promote your new products through your existing marketing channels or get ideas from this list of 60+.
Does your current product niche still align with market demands? Are there problems with your current products or their fulfillment that could be fixed with dropshipping?
Check if your existing products can be dropshipped by contacting your existing suppliers. Negotiate terms, delivery times, and costs or shop around for better terms. How does dropshipping impact profit margins for your existing products?
If you have existing inventory, decide whether you want to sell it off or integrate it with the dropshipping model.
Update product listings and notify your existing customers if there are any significant changes to shipping, pricing, product details, or images. Email or social media are great channels.
Test the new setup to see if orders are processed correctly. For example, if you’ve set up automatic fulfillment, when a customer orders a dropship product, the order should be automatically forwarded to your supplier for fulfillment.
Be prepared for returns. Make sure that your new systems for tracking, sharing progress with your customers, and refunding, are also prepared.
Depending on your business needs, you can set up either manual or automatic order fulfillment. The fastest way to test dropshipping for your existing store is to get set up with a supplier that uses a third-party app that integrates with Shopify.
DSers is AliExpress’ official dropshipping app for Shopify. It enables you to list products from multiple suppliers from AliExpress. Manage different shipping policies and automatically present them on your Shopify storefront. Supports partial, manual, or automated order fulfillment. This service is especially useful for stores with high volumes.
Zendrop has a catalog of over 1 million products and options for automation.
MIIUT is a dropshipping app that allows for partial automation in the ordering process.
AutoDS is a popular dropshipping app for both manual and automatic order fulfillment. For manual, whenever an order is made, you can log on to your supplier's website, purchase the product, and put in your customer’s shipping details. Status updates require manual adjustments, for example from pending to ordered. Alternatively, AutoDS can fully automate payment processing (using auto-ordering credits), order fulfillment, and real-time tracking updates to your customers.
Trendsi is specialized in dropshipping for fashion products.
Other dropshipping apps and marketplaces to consider for your Shopify store:
Ali Orders for AliExpress
EPROLO for private label branding
Spocket for the US and EU
Dropshipping can reduce logistical burdens of e-commerce, but there are other solutions that can make your life easier when managing an Shopify store:
Private label: selling products produced by another company under your brand name. Unlike traditional dropshipping, you can add your logos and can build an exclusive brand. The risk is that you typically have higher startup costs and have to commit to ordering and storing minimum order quantities.
E-commerce management service takes care of your store day-to-day while you receive passive income payments.
Sell your Shopify store to OpenStore: if setting up dropshipping seems daunting, considering making an exit. OpenStore will integrate your supply chain with our reliable third-party logistics provider. Plus, with a team of specialists in fulfillment, sourcing, design, and marketing, OpenStore runs nearly 50 Shopify stores in the U.S. and will ensure that your customers continue to receive outstanding service, and that your brand lives on.
Find out what your Shopify store is worth
You don’t have to be looking to sell your Shopify store to use this form — just follow our simple steps for a free valuation:
Whether you're considering third-party logistics or free shipping for your Shopify store — our expert, ex-Amazon insights will help...
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